This appeal challenges administrative actions by the Local Boundary Commission and the Local Affairs Agency
On April 6, 1971, a petition for incorporation of a first class organized borough was submitted to the Local Affairs Agency by the Arctic Slope Native Association.
Upon receipt of the petition and pursuant to its duties under AS 07.10.060-.090,
The Commission, pursuant to AS 07.10.100.110,
These corporations and individuals are holders of surface leases and owners of interests in oil and gas wells and other real and personal property in the area of Prudhoe Bay. In the superior court, they sought a declaratory judgment against the Local Boundary Commission, the Lieutenant Governor and the state holding the incorporation invalid. The five incorporated cities within the borough, two residents of the area, the Arctic Slope Native Association and the North Slope Borough were permitted to intervene as defendants. After motions for summary judgment by all parties were denied, the superior court upheld acceptance of the petition, finding, inter alia, that the investigations of the Local Affairs Agency and the Local Boundary Commission were consistent with procedural due process, that inclusion of the plaintiffs' property within the borough did not deny substantive due process, and that the evidence assembled gave substantial ssupport to the Commission's action. The defendants were awarded $20,000.00 attorneys' fees. From the judgment affirming the Commission and the order awarding attorneys' fees, all plaintiffs below appeal.
The property owners challenge the procedures of the administrative agencies, the scope of review applied by the superior court and the adequacy of the evidence supporting organization of the North Slope Borough. They raise the following arguments: (1) the Local Boundary Commission did not produce required findings of fact; (2) the superior court should not have deferred to the Commission's interpretation of the statutory criteria for incorporation; (3) acceptance of the borough petition was not supported by substantial evidence; (4) inclusion of the plaintiffs' property within the borough denied them substantive due process; (5) the accepted incorporation petition should have been submitted to the legislature; and (6) attorneys' fees should not have been awarded to the prevailing parties.
I. FINDINGS OF FACT
AS 07.10.110 permits judicial review of the Commission's acceptance of an
The special function of the Commission, to undertake a broad inquiry into the desirability of creating a political subdivision of the state, makes us reluctant to impose an independent judicial requirement that findings be prepared.
II. SCOPE OF REVIEW
Appellants attack the scope of the superior court's review of the Commission's
The appellants argue that neither the geography nor the transportation standard is satisfied by the record evidence. Our review of the record has been undertaken in light of the statement of purpose accompanying article X, the local government article, of the Alaska constitution. Section 1 declares in part:
We read this to favor upholding organization of boroughs by the Local Boundary Commission whenever the requirements for incorporation have been minimally met.
The geography standard, AS 07.10.030(2), provided that borough boundaries are to "conform generally to the natural geography of the area" and "include all areas necessary and proper for the full development of integrated local government services." However, "all areas such as military reservations, glaciers, ice caps, and uninhabited and unused lands" are to be excluded "unless such areas are necessary or desirable for integrated local government." The property owners point out that the borough encompasses Naval Petroleum Reserve No. 4
Regular travel among borough communities is available only by charter aircraft. Surface transportation is limited to dog teams and snowmachines. Even at this stage of development, we agree with the superior court that the Commission could reasonably have found travel facilities adequate to support borough government when present and future capacity is considered in the context of transportation in Alaska generally and compared to the present cost and availability of travel to centers of government which affect the lives of North Slope residents.
III. SUBSTANTIVE DUE PROCESS
By concluding that the Commission's application of the geography and transportation standards was reasonable, we reach the contention that inclusion of the plaintiff's property at Prudhoe Bay within the North Slope Borough is a denial of substantive due process. In support of this proposition, the property owners offer a series of cases striking down municipal annexations and incorporations where the lands taken have been found to receive no benefit.
The limitation has been found implicit in words like "city" or "town" in statutes and constitutions
Aside from the standards for incorporation in AS 07.10.030, there are no limitations in Alaska law on the organization of borough governments. Our constitution encourages their creation. Alaska const. art. X, § 1. And boroughs are not restricted to the form and function of municipalities. They are meant to provide local government for regions as well as localities and encompass lands with no present municipal use.
Appellants also direct us to Myles Salt Co., Ltd. v. Board of Commissioners, 239 U.S. 478, 36 S.Ct. 204, 60 L.Ed. 392 (1916), which found creation of a drainage district to violate due process in the absence of a benefit to property within its boundaries; but the case is of limited application to this appeal. It involved a Louisiana landowner's objection to taxes levied to protect lands within the drainage district from tidal overflows. Myles Salt Company owned an island with the highest uniform elevation in southwest Louisiana, so that it suffered erosion and excessive drainage but not flooding. Taking the allegations of the company as true, the Supreme Court held that forced payment of assessments for drainage which would never benefit Myles Salt Company would constitute a denial of due process.
We feel three characteristics of this case warrant our attention. The question of law upon which the case turned was whether organization of the drainage district was "palpably arbitrary and a plain abuse" of the state's broad power to create special service districts.
Moreover, the entity under attack was a drainage district and not a unit of government.
As exampled below, there may be acceptable public purposes which justify creation of a body of government but do not confer a felt benefit upon particular property owners. The lesson of Myles Salt which survives generalization from its particular facts to this appeal is only the familiar principle that the legislature may not act arbitrarily.
We can perceive why the legislature might authorize organization of a North Slope borough. As an example, private developers at Prudhoe Bay may gear their investments in the design and construction of camps, roads, airports and the like for a maximum return over the projected life of the surrounding oil fields. The state, on the other hand, may prefer development of the surface with a view to its long-run utility as a permanent arctic community. Need for the state to oversee the course of private development could be met by a local government body which promulgates and enforces planning and zoning regulations.
The uncontested ability of the property owners to supply many of the services which the North Slope Borough is empowered to provide is not relevant to the question of due process. Judicial inquiry does not reach whether incorporation is desirable. The state may reasonably conclude that private development interests do not align with the public interest, that the economic motivating co-ordinated development may evolve in time to favor independent action by the property owners, and that, for example, an active planning and zoning authority in the form of a borough would assure that private agreements and intentions do not waiver and development diverge from the long-range interests of North Slope residents and the state.
IV. APPROVAL OF THE PETITION BY THE LEGISLATURE
The property owners also argue that the accepted incorporation petition should have been submitted by the Local Boundary Commission to the legislature. They contend this course is required by article X, section 12 of the Alaska constitution which provides:
Organization of a borough involves a boundary change, in their view, because the entire state is divided into several organized and one residual unorganized borough.
The borough's supporters assert that because the legislature delegated the power of incorporation to the Local Boundary Commission through Title 7 without reserving any power of review the Commission's decision need not be submitted to the legislature. We agree. Section 3 vests in the legislature power to prescribe procedures for borough incorporation without restriction. The framework of Title 7 and the past conduct of the Local Boundary Commission persuade us that both the legislature and the agency charged with organizing boroughs have adopted this construction. The only legislative reservation in Title 7 was addressed to adjustments made by the Commission in boundaries of organized boroughs.
Aside from the powers granted by article X, section 3, the weakness of appellants' argument that section 12 requires submission of the accepted incorporation petition to the legislature lies in their equation of the boundary changes contemplated by section 12 with the unavoidable diminution of the residual unorganized borough whenever a functioning borough government is created. Oesau v. City of Dillingham,
In this appeal, the superior court correctly determined that this policy does not reach creation of an organized borough from the nonfunctioning unorganized borough. The court observed:
Carving a new unit of government from the unorganized borough generates no controversy between governments with competing economic and political interests. The conflicts accompanying boundary adjustments between two functioning governments which must be submitted to the legislature under section 12 do not afflict mere incorporation.
Nor is the constitutional history to which we are directed by the property owners persuasive. The single relevant ramark is ambiguous and inconclusive on this point. In the debate on adoption of article X before the full convention, Delegate Doogan commented:
Mention of agreements between two existing local governments to adjust mutual boundaries vitiates whatever force the board references in the debate to "all cases" might have in resolving whether incorporation petitions must be submitted to the legislature. The convention simply did not address the question. Accordingly, we adopt the view of the superior court, the legislature and the Local Boundary Commission and hold that submission of an accepted incorporation petition to the legislature is not required by the state constitution.
V. ATTORNEYS' FEES
Finally, the property owners contend that the superior court's award of $20,000 attorneys' fees to the prevailing parties was improper. Such award is permitted by Alaska Rule of Civil Procedure 82(a) and will not be set aside absent an abuse of discretion.
The decision of the superior court is affirmed.
BOOCHEVER, J., not participating.
Title 7 was repealed by ch. 118, SLA 1972 in favor of the new Title 29, effective September 10, 1972. Section 3 of the repealer preserved existing rights and duties allowing this appeal to be decided under Title 7.
We have have previously held that in areas of agency expertise or fundamental policy formulation the proper standard on review is whether the agency action has a reasonable basis. E.g., Swindel v. Kelly, 499 P.2d 291, 298 (Alaska 1972). The standard appropriate for this appeal is discussed at Part II, infra.
Only satisfaction of paragraph (2), the geography standard, and (4), the transportation standard, are at issue in this appeal.
The authors describe how evolution of the borough has reflected this intended flexibility.
Id. at 107-09 (emphasis in original).
We note that the Supreme Court had previously held matters of local government organization to be within the absolute discretion of the state. No question of federal due process could be raised. Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151 (1907). Myles Salt did not disturb this holding. It has been narrowed by subsequent voting rights cases, e.g., Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962); Gomillion v. Lightfoot, 364 U.S. 339, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960), to permit annexations to be attacked on equal protection and right to vote theories; but the substantive due process holding remains intact. Deane Hill Country Club, Inc. v. City of Knoxville, 379 F.2d 321 (6th Cir.), cert. denied, 389 U.S. 975, 88 S.Ct. 476, 19 L.Ed.2d 467 (1967); Detroit Edison Co. v. East China Township School District No. 3, 247 F.Supp. 296 (E.D.Mich. 1965), aff'd, 378 F.2d 225 (6th Cir.), cert. denied, 389 U.S. 932, 88 S.Ct. 296, 19 L.Ed.2d 284 (1967).
See Alaska const. art. X, § 3, in the text accompanying this note.